1993 (10) TMI 334 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of exemption under section 3B of the Assam Finance (Sales Tax) Act, 1956.
2. Entitlement to exemption under section 8(2-A) of the Central Sales Tax Act, 1956.

Analysis:
1. The petitioner, a partnership firm engaged in manufacturing coke, claimed exemption from sales tax under the Assam Finance (Sales Tax) Act, 1956, based on a notification issued under section 3B of the Act. The State Government granted exemption to dealers for sales of goods produced in new industrial units for five years. The petitioner contended that this exemption was general in nature and also entitled them to exemption under section 8(2-A) of the Central Act. However, the Assistant Commissioner revised the assessment, challenging the exemption. The High Court noted that the exemption under the notification was not dependent on specific circumstances or conditions, making it a case of exemption from tax generally, thus entitling the petitioner to benefit under the Central Act.

2. The key issue revolved around the interpretation of section 8(2-A) of the Central Act, which provides for nil tax on turnover related to goods exempt from tax generally under the State sales tax law. The Government Advocate argued that the exemption in this case was not "tax generally" but "in specified circumstances or under specified conditions," thus not attracting section 8(2-A). However, the Court disagreed, emphasizing that the exemption granted under section 3B of the State Act was not subject to specific conditions but applied to all goods produced in new industrial units during the specified period. As such, the Court held that the petitioner was entitled to exemption under the Central Act as well.

3. Citing precedents and the nature of the exemption granted, the Court concluded that the petitioner's sales of goods, produced in a new industrial unit during the exemption period, fell under the category of exemption from tax generally. Therefore, the Court quashed the order challenging the exemption and allowed the writ petition in favor of the petitioner without costs.

In summary, the judgment clarified the scope of exemption under section 3B of the Assam Finance (Sales Tax) Act, 1956, and affirmed the petitioner's entitlement to exemption under section 8(2-A) of the Central Sales Tax Act, 1956, based on the general nature of the exemption granted for goods produced in new industrial units.